In a totally unexpected manner, the long-inactive Ethereum accounts recently made the move of getting rid of 2,800 tokens, which were unearthed from $2 bn stock belonging to the semi-infamous PlusToken Ponzi scheme in China. The abrupt detection of the news early on Aug 7th had a great impact on the crypto community and shook the market Ethereum is a part of.
Background of the PlusToken Scam
PlusToken was one of the most infamous Ponzi schemes in the world of cryptocurrency that was broken up by Chinese authorities in 2020. The fact the scheme had defrauded lots of investors and the subsequent seizer of cryptocurrencies worth $14 billion at the current valuation were probably the worst parts. This consisted of 194,775 Bitcoin (BTC) and 833,083 Ethereum (ETH) among other digital assets.
In order to gain access to those returns, the PlusToken project was enticing almost everybody to get involved despite the fact that there were clear signs of its possible failure. In 2021, Chinese law enforcement agencies seized a large portion of the assets and hence, 15 defendants were convicted in a district court in Yancheng.
Recent Wallet Movements
Info from Etherscan reveals that those addresses were dormant for at least three years, the last activity being a fund transfer from a wallet labeled “Plus Token Ponzi 2” in April 2021. The quick return of Ethern prices showed a loss of 2%, along with the hundreds of wallets that moved reserves of a great sum of Ether.
Market Reactions
Cryptomarket traders feel a bit jumpy. Ethereum (ETH) plunged by 2% after the news. Besides that, other main cryptocurrencies, for instance Bitcoin (BTC) and Ripple (XRP) encountered some small dips as well.
Compared to Mt. Gox, that event is now referred to as the catalyst where there was a large amount of Bitcoin sold, and affecting the price. A potential risk that is being highly spoke of is that if those funds are redeemed, it may cause further pressure to sell on Ethereum through.
Impact on Ethereum
Especially, Jump Crypto, the market creator, also shifted such a sum of ETH at exchanges like Binance and Coinbase, $277 million, through the sites. In addition, the company has not yet unstaked several thousand Ethers from Lido Finance, signifying potential liquidation plans.
As of now, we have not heard of any formal reports from the Chinese authorities where they are selling ETH or Jump Crypto, who is offloading the asset in return of stablecoins, the people engaged in the cryptocurrency industry are very worried. Such actions may provoke strong sales of Ethereum, which has so far been down by 25% over the week.
Current Market Status
Despite the havoc, Ethereum’s market price is still somewhat stable. It barely surpassed the $2,400 mark, and more than twice the time the price stood still at just 0.7% improvement over the last day.
The ongoing developments have been highlighted as the volatility and unpredictability that are present in the cryptocurrency market. The potential consequences of the situation will be closely watched by the investors and stakeholders.
